Report: Extended-stay hotels outperform overall industry in September
Extended-stay revenue saw its largest monthly boost in four months
By Vishnu Rageev RNov 06, 2023
EXTENDED-STAY HOTELS performance metrics bettered the overall hotel industry in September, according to The Highland Group. The extended-stay supply surged three times faster than all hotels during the month, though it remains lower compared to the long-term average. Moreover, the demand for extended-stay grew by 1.9 percent, while the overall hotel industry showed no growth as reported by STR/Costar.
The overall hotel ADR growth outpaced that of extended-stay hotels in September, primarily driven by the upscale segment, the report said. The midprice and upscale extended-stay segments also showed stronger RevPAR growth compared to the overall hotel industry. However, the decline in economy extended-stay hotel RevPAR offset the overall gain in the extended-stay sector. Economy extended-stay hotel RevPAR declined over the last six months, but the rate of decline has slowed, and it is anticipated to become positive in the near future.
According to the report, the 2.2 percent net increase in extended-stay room supply in September marks a slight uptick compared to the average of the past 15 months. There were two consecutive years of supply growth at 4 percent or lower during the month, significantly below the long-term average.
The 13 percent rise in economy extended-stay supply, along with a decrease in mid-price segment rooms, is mainly a result of conversions, it added. New construction in the economy segment is estimated at about 2 percent of rooms open compared to one year ago.
The report said that supply change comparisons have been affected by re-branding, the reclassification of rooms between segments in Highland Group’s database, de-flagging of hotels no longer meeting brand standards, as well as the sales of certain hotels to multi-family apartment companies and municipalities.
This is likely to continue in 2023, as relatively large portfolios of older extended-stay hotels have recently become available on the market, Highland Group said. However, the full-year increase in total extended-stay supply compared to 2022 will remain well below the long-term average.
Peak monthly increase
Total extended-stay hotel revenue saw its most substantial monthly increase in four months in September, outpacing the 3.7 percent gain reported by STR/CoStar for all hotels in the same period. For the second time in 18 months, the economy segment saw a monthly rise in demand. However, this was primarily attributed to a significant increase in supply from conversions, which also had a negative impact on the change in demand in the mid-price segment, the report said.
Furthermore, total extended-stay demand increased, while STR/CoStar estimated no growth for the overall hotel industry compared to September 2022. The extended-stay hotel occupancy exceeded that of the overall hotel industry by 10.7 percentage points in September, aligning with the historical long-term average, Highland Group said.
The extended-stay ADR increase was the highest in four months in September, and segment-wise gains were more closely aligned compared to recent months. Total extended-stay ADR exceeded its nominal value in 2019 for the 23rd consecutive month. However, the growth in ADR in September, slightly trailing the 3.7 percent gain reported by STR/CoStar for the overall hotel industry, was consistent with the rates observed in late 2018 through 2019.
Meanwhile, the mid-price and upscale extended-stay RevPAR outperformed the overall hotel industry during the month. RevPAR in the economy segment has declined over the past six months. However, the decline in September was the smallest over this period, and significantly less than the 3.8 percent contraction reported by STR/CoStar for all economy segment hotels.
A recent report by Highland Group and Kalibri Labs revealed that traditional hotels outperformed extended-stay counterparts by 21 percent in revenues, indicating potential growth in the extended-stay sector. Over the 12 months ending in June 2023, traditional hotels earned $8.97 billion for stays exceeding seven nights, while extended-stay hotels earned $7.39 billion. Furthermore, in nine markets, traditional hotels led in extended-stay demand.
AHLA Foundation distributed $710,000 in scholarships to 246 students.
Nearly 90 percent of recipients come from underrepresented communities.
The foundation funds students pursuing education and careers in the lodging sector.
AHLA FOUNDATION DISTRIBUTED $710,000 in academic scholarships to 246 students at 64 schools nationwide for the 2025–2026 academic year. Nearly 90 percent of recipients are from underrepresented communities, reflecting the foundation’s focus on expanding access to hospitality careers.
The foundation awards academic scholarships annually to students in hospitality management and related programs, it said in a statement.
“Our scholarship program is helping ensure the next generation of talent has the resources to pursue careers in the hospitality industry,” said Kevin Carey, AHLA Foundation's president and CEO. “We’ve invested millions of dollars over the last several decades to recruit and support future leaders who will strengthen our industry.”
It provides funding to help students pursue education and careers in the lodging sector, the statement said. Award decisions are based on applicants’ academic performance, extracurricular involvement, recommendations and financial need.
In September, AHLA Foundation, the International Council on Hotel, Restaurant and Institutional Education and the Accreditation Commission for Programs in Hospitality Administration announced plans to expand education opportunities for hospitality students. The alliance aim to provide data, faculty development and student engagement opportunities.
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The U.S. government shut down at midnight after Congress failed to agree on funding.
About 750,000 federal employees will be furloughed daily, costing $400 million.
Key immigration and labor programs are halted.
THE FEDERAL GOVERNMENT shut down at midnight after Republicans and Democrats failed to agree on funding. Disputes over healthcare subsidies and spending priorities left both sides unwilling to accept responsibility.
The shutdown could cost America’s travel economy $1 billion a week, the U.S. Travel Association said previously. It will disrupt federal agencies, including the Transportation Security Administration and hurt the travel economy, USTA CEO Geoff Freeman wrote in a Sept. 25 letter to Congress.
“A shutdown is a wholly preventable blow to America’s travel economy—costing $1 billion each week—and affecting millions of travelers and businesses while straining an already overextended federal travel workforce,” Freeman said. “While Congress recently provided a $12.5 billion down payment to modernize our nation’s air travel system and improve safety and efficiency, this modernization will stop in the event of a shutdown.”
USTA said that halting air traffic controller hiring and training would worsen a nationwide shortage of more than 2,800 controllers and further strain the air travel system.
About 750,000 federal workers are expected to be furloughed each day at a cost of about $400 million, according to the Congressional Budget Office. Essential services to protect life and property remain operational, CNN reported. The Department of Education said most of its staff will be furloughed, while the Department of Homeland Security will continue much of its work. Agencies released contingency plans before the deadline.
Immigration services are directly affected. Most U.S. Citizenship and Immigration Services operations continue because they are fee funded, but programs relying on appropriations—such as E-Verify, the Conrad 30 J-1 physician program and the special immigrant religious worker program—are suspended. Houston law firm Reddy Neumann Brown said employers must manually verify I-9 documents if E-Verify goes offline, though USCIS has historically extended compliance deadlines.
The Department of Labor will halt its Office of Foreign Labor Certification, freezing labor condition applications for H-1B visas, PERM applications and prevailing wage determinations, India’s Business Standard reported. Its FLAG system and related websites will also go offline. Immigration lawyers warn of ripple effects, since USCIS depends on DOL data. The Board of Alien Labor Certification Appeals and administrative law dockets will also pause.
Visa and passport services at U.S. consulates generally continue because they are fee funded. If revenue falls short at a post, services may be limited to emergencies and diplomatic needs.
Reuters reported that the disruption could delay the September jobs report, slow air travel, suspend scientific research, withhold pay from active-duty U.S. troops and disrupt other government operations. The funding standoff involves $1.7 trillion in discretionary agency spending—about one-quarter of the $7 trillion federal budget, according to Reuters. Most of the rest goes to health programs, retirement benefits and interest on the $37.5 trillion national debt.
According to The New York Times, unlike previous shutdowns, Trump is threatening long-term changes to the government if Democrats do not concede to demands, including firing workers and permanently cutting programs they support.
The U.S. led global travel and tourism in 2024 with $2.6 trillion in GDP, WTTC reported.
India retained ninth place with $249.3 billion in GDP.
The sector supported 357 million jobs in 2024, rising to 371 million in 2025.
THE U.S. LED global travel and tourism in 2024, contributing $2.6 trillion to GDP, mainly from domestic demand, according to the World Travel & Tourism Council. Europe accounted for five of the top 10 destinations, while India ranked 9th.
WTTC opened its 25th Global Summit in Rome with research showing investment reached $1 trillion in 2024, led by the U.S., China, Saudi Arabia and France.
“These results tell a story of strength and opportunity,” said Gloria Guevara, WTTC interim CEO. “The U.S. remains the world’s largest travel and tourism market, China is surging back, Europe is powering ahead, and destinations across the Middle East, Asia and Africa are delivering record growth. This year, we are forecasting that our sector will contribute a historic $2.1 trillion in 2025, surpassing the previous high of $1.9 trillion in 2019. As Italy hosts this year’s Global Summit, its role as a G7 leader showcases the importance of tourism in driving economies, creating jobs and shaping our shared future.”
The U.S. kept its top position, but international visitor spending is expected to fall by $12.5 billion in 2025, limiting growth to 0.7 percent. China, the second-largest market, contributed $1.64 trillion in 2024 and is forecast to grow 22.7 percent this year. Japan, the fifth-largest market, is expected to rise from $310.5 billion to nearly $325 billion.
Italy, which hosted the summit and is a G7 member, contributed $248.3 billion in 2024, driven by international visitors and the meetings and events sector. Germany, the third-largest market, contributed $525 billion. The UK generated $367 billion despite a fall in international visitor spending, while France and Spain added $289 billion and $270 billion. Europe’s growth was supported by both cultural and modern sectors.
India contributed $249.3 billion in 2024. In June, WTTC reported international visitors spent $36.09 billion in India in last year, up 9 percent from 2019.
Jobs on the rise
Travel and tourism supported 357 million jobs in 2024 and is expected to reach 371 million in 2025, increasing its share of global employment, the WTTC report found. By 2035, the sector is projected to support one in eight jobs worldwide, adding 91 million positions—most in Asia-Pacific—and accounting for one in three new jobs globally.
Uncertainties over trade tariffs and geopolitical tensions could limit sector growth in 2025, the report said. Travel and tourism’s GDP contribution is forecast to rise 6.7 percent, returning toward pre-pandemic averages but still outpacing the 2.5 percent growth projected for the global economy.
The sector is expected to contribute $11.7 trillion, or 10.3 percent of global GDP and add 14.4 million jobs, bringing total employment to 371 million, or 10.9 percent of global jobs. International visitor spending is projected to fully recover, rising 8.6 percent above 2019 levels to nearly $2.1 trillion, while domestic visitor spending is expected to rise 13.6 percent to $5.6 trillion. Annual growth for 2025 is forecast at 10 percent for international and 5.1 percent for domestic spending.
In May, WTTC projected the U.S. stood to lose $12.5 billion in international travel spending this year, falling to under $169 billion from $181 billion in 2024. The council said U.S. needs to do more to welcome international visitors rather than “putting up the ‘closed’ sign.”
President Donald Trump will meet Congress as a shutdown looms.
Democrats say they are ready to negotiate a bipartisan deal.
Thousands of federal jobs and the U.S. travel economy are at risk if a shutdown occurs.
PRESIDENT DONALD TRUMP will meet Congressional leaders on Monday after Senate Democrats rejected a Republican stopgap spending bill to fund the government until Nov. 21. The U.S. Travel Association recently warned a government shutdown could cost the travel economy $1 billion a week.
Democrats want spending bills to reverse Trump’s Medicaid cuts, while Republicans want healthcare addressed in broader budget talks, according to Al Jazeera.
Senate Minority Leader Chuck Schumer, House Minority Leader Hakeem Jeffries, House Speaker Mike Johnson and Senate Majority Leader John Thune are expected to meet Trump at the White House.
“If it has to shut down, it’ll have to shut down. But they’re the ones that are shutting down government,” Trump told ABC News.
Democrats shifted the blame to Trump but also kept the door open to negotiations.
“President Trump has once again agreed to a meeting in the Oval Office,” the Democratic leaders said. “As we have repeatedly said, Democrats will meet anywhere, at any time and with anyone to negotiate a bipartisan spending agreement that meets the needs of the American people. We are resolute in our determination to avoid a government shutdown and address the Republican healthcare crisis. Time is running out.”
The government will shut down Wednesday if Congress doesn’t pass a short-term spending bill. The Senate could vote Monday on an extension Democrats previously rejected, The Wall Street Journal reported.
The White House warned that thousands of government jobs could be at risk if the government shuts down at midnight Tuesday. In a memo to federal agencies, the administration said Reduction-in-Force plans would go beyond standard furloughs, according to POLITICO.
Trump reportedly warned Sunday of widespread layoffs if the government shuts down this week.
“We are going to cut a lot of the people that … we’re able to cut on a permanent basis,” he said.
More than 100,000 federal employees could lose their jobs as early as Tuesday if the government shuts down, India’s Times Now reported.
A shutdown would disrupt federal agencies, including the TSA and hurt the travel economy, USTA CEO Geoff Freeman wrote in a Sept. 25 letter to Congress.
A recent Ipsos survey cited in the USTA letter found 60 percent of Americans would cancel or avoid air travel during a shutdown. About 81 percent said shutdowns harm the economy and inconvenience travelers and 88 percent said Congress should act across party lines to prevent one.
Millennials lead global travel retail, spending $151 per trip, according to m1nd-set.
Baby Boomers fell from 30 percent to 9 percent of travelers, spending $107 per trip.
Millennials dominate business travel, but Gen Z’s strategic importance remains.
MILLENIAL BUSINESS TRAVELERS lead global travel retail spending, averaging $151 per trip versus the $128 global average, according to m1nd-set, a Swiss travel marketing research agency. Baby Boomers dropped from nearly 30 percent of travelers pre-pandemic to 9 percent, with an average spend of $107.
The m1nd-set study found millennials aged 29 to 44 now make up nearly 40 percent of global business travelers, highlighting their influence on travel retail. It urged brands and retailers to adapt to changing digital preferences and values.
“A key finding of this research is the importance of staff engagement in influencing Millennial shoppers,” said Peter Mohn, m1nd-set owner and CEO. “Millennials are more open to staff recommendations in store. More than eight out of ten who interacted with staff report being positively influenced, compared to just over six out of ten Boomers.”
Millennial travelers are also more price-savvy, using digital tools and comparison channels more than older travelers, the study found. They engage more with duty free communications before travel, particularly via social media and inflight touchpoints.
While Millennials drive current revenue, the report warns of upcoming generational shifts. Gen Z, expected to be the largest passenger group by 2028, is already shaping consumption trends.
Mohn said that while Millennials lead business travel, stakeholders should not overlook Gen Z’s strategic importance.
“Millennials dominate spending today, but Gen Z represents a much larger global population and will become the largest air passenger group by 2028,” he said. “This generational shift makes it essential for brands and retailers to adapt strategies now. With the right mix of experiences, service and digital-first approaches, retailers can harness Millennial spending today while building loyalty with Gen Z tomorrow.”